One of the most important things you can do when you own a business is to understand the actions of your competitors. What are other businesses in the industry doing, what have they already done and what can you do to actively compete against them? By defining the strengths and weaknesses of your competition, you can actively identify the opportunities and threats they present and, ideally, know exactly when to launch your product.
When you look at the competition, you do a few things. First you can see what mistakes they have already made, allowing you to actively avoid making the same or similar mistakes. Second, you can create a clear picture of what companies or startups pose a threat to your company.
This starts by creating a competitor array and ranking you competitors according to factors like distribution, customer focus, economies of scale and product innovation. In effect, how many people can they reach, how well do they do it and what type of product or service do they put in front of those people?
By weighting your competitors you can easily identify which of them likely poses the greatest threat to you in the event of a new product launch or a new marketing campaign. At the same time, this is the first step in the process of competitor profiling, which allows you to clearly identify the assets and likely actions of your competitors.
As a business owner, information is your most valuable weapon; the more you have, the better you can respond to the actions of the other side. The more frequently and in-depth you analyze your competitors, the better you will be able to respond to them in the market.
So, once you know everything you need to know about your competitor, what can you do with that data? One decision you should never make without first profiling your competition is timing a product launch. You do not want the launch of your product to overlap with that of your competitor, or worse, for it to be overshadowed in some way.
If you have systematic profiling on those companies that rate high in your competitor array, you will know when they plan on taking action, what they have in development and when the best time to take action is. You can quite literally time your launch to be as beneficial for you and as detrimental for them as possible.
Competition analysis is an immensely valuable tool used by all the largest corporations in the world. If you have not yet made it a part of your marketing strategy, consider doing so now. Not only will you better understand what your competitors plan to do next, but you will also be well situated to take action on it. Talk to our ‘analyst on hire’ today
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